Really short post.

I have noticed that the share price of Starhub has been rising significantly in the recent weeks, and that quite a few people have been recommending Starhub based on its yield.

Although I think the company is fundamentally sound, I feel that investors are focusing too much on the yield and ignoring the valuations.

Currently SH trades at a PE ratio of 18.65. Owner Earnings (Reported Earnings + Depreciation, Amortization & Other Non Cash Items – Capital Expenditures), which is similar to Free Cash Flow was 250.3 Million in 2010.

With its market cap of roughly 5 billion, it gives it a Price/Owner Earnings Ratio of about 20.

What I find more disturbing is that Starhub paid out 343.1 Million in dividends in 2010. It earned 4 & 4.54 cents per share in the first and second quarter this year, yet paid out ...